Amazon stock plunges after downgrade

This morning, Citigroup analyst Mark Mahaney downgraded Amazon’s stock because of concerns about the larger economy.

After Amazon released its third quarter results, shares surged as much as 36 percent, Mahaney said, “primarily due to growth rates that are surprisingly strong in a severe recession, but also due in part to increased enthusiasm for its Kindle product.”

However, Mahaney pointed out that at the same time, consumer spending keeps falling. He pointed to Blue Nile’s recent sales decline, and Expedia’s comments that it saw weakness in September and October across all products and geographies.